IBM’s deal with Airtel can touch $1 bn in next 5 yrs: Analyst

Tech giant IBM‘s deal with India‘s largest private telecom operator, Airtel, to manage its infra and application services is expected to touch USD 1 billion in the next five years, research firm Greyhound said today. The firm also estimates that the current size of the deal — that was announced yesterday — is in the range of USD 750- 850 million.

“We expect it to touch USD 1 billion over the next five years with incremental focus on Analytics and Big Data,” Greyhound Research CEO and Chief Analyst Sanchit Vir Gogia told PTI.

Touted to be a new agreement, it builds on the 10-year relationship between the two organisations, a deal that was signed for USD 750 million in 2004 and eventually touched USD 2.5 billion, he added.

Comparing the previous and the current deal, Gogia said when this deal was inked in 2004, Bharti Airtel was in a hyper growth mode and needed extensive support from an external IT vendor to support the rapid growth and also build internal capabilities to support the IT setup.

“Bharti’s business has grown 10 times in the past decade India and between 2004 and 2014 its subscriber base has grown from 4 million to over 200 million. It is now in a relatively mature stage where it needs to effectively maintain what it has built as part of its IT setup over the past decade and only add incrementally,” he added.

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